Steven L. Bahr and Cynthia L. Bahr v. Emerald Bay Property Owners Association, Inc. ( 2018 )

In The
Court of Appeals
Ninth District of Texas at Beaumont
_________________
NO. 09-16-00325-CV
_________________
STEVEN L. BAHR and CYNTHIA L. BAHR, Appellants
V.
EMERALD BAY PROPERTY OWNERS ASSOCIATION, INC., Appellee
________________________________________________________________________
On Appeal from the 258th District Court
Polk County, Texas
Trial Cause No. CIV29248
________________________________________________________________________
MEMORANDUM OPINION
Emerald Bay Property Owners Association, Inc. (“the Association”) filed suit
against Steven L. Bahr and Cynthia L. Bahr for an alleged violation of a fence
provision contained in Emerald Bay Subdivision’s 1999 Amended Deed
Restrictions. The Bahrs responded by filing a counterclaim against the Association
and its directors individually. In response to a Rule 91a motion to dismiss, the trial
court dismissed the Bahrs’ counterclaim against all defendants. The original parties
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then filed competing motions for summary judgment. After a hearing, the trial court
denied the Bahrs’ motion for summary judgment and granted summary judgment in
favor of the Association. The Bahrs appeal the trial court’s judgment. We affirm the
trial court’s final judgment.
I. Background
The underlying lawsuit arises from dispute over a fence erected by the Bahrs.
In its original petition, the Association detailed the existence of deed restrictions
burdening the property, and asserted the most recent applicable restrictions were
contained in the 1999 Amended Restrictions, specifically paragraph 4(B). The
provision contained in 4(b) provides:
(B) No wall, fence, planter[,] or hedge shall be erected or constructed
on lots that do not meet the following conditions:
No wall, fence, planter[,] or hedge shall be erected or constructed
between the front property line and a point 8 feet in front of the dwelling
or associated garage or shed and within accordance with the front set
back line restrictions. No wall[,] fence, planter[,] or hedge will be
erected or constructed on any corner lot between the side property line
and the side set back line adjacent to the street. Walls, fences, plants, or
hedges may be erected, but may not extend more than 8 feet from a
dwelling or associated garage or shed. Decorative fences along the front
easement are permitted with approval of the Board. Fences for child
and pet containment and safety are permitted, but can not [sic] extend
more than 8 feet from the associated dwelling, garage, or shed and must
be approved by the Board of Directors. (Emphasis added).
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The Association claimed that the Bahrs’ predecessors in title burdened the
property at issue with the 1999 Amended Deed Restrictions by executing the
“Acknowledgment by Property Owner(s) to Amended Restrictions for Emerald Bay
Subdivision, Polk County, Texas” on August 31, 1999. The record reflects that the
subsequent conveyances of the property at issue, including the conveyance to the
Bahrs, referenced the amended restrictions in the deeds.
The Association presented evidence that other property owners in the
neighborhood had previously sought approval from the Association’s board of
directors in conformance with the 1999 Amended Restrictions when seeking
permission to build various items covered by the Restrictions. The record also
reflects that the Bahrs themselves acknowledged the existence of the Association
and the restrictions when they sought permission to extend their garage the previous
year.
When the Bahrs constructed a fence on the property in April 2014, the
Association’s Secretary sent an email to Steven Bahr advising that the fence was in
violation of the 1999 Amended Restrictions and that the Bahrs would have to remove
the fence. The Association subsequently sent a certified letter regarding the deed
restriction violation notice to the Bahrs, advising them they needed to remove the
fence pursuant to chapter 209 of the Property Code. The Bahrs responded through
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their attorney stating that they denied any violation alleged in the Association’s letter
and that they would continue to defend and enjoy their property as they saw fit, along
with providing a trespass warning to the Association regarding their property.
In its original petition, the Association sought a temporary injunction, a
permanent injunction, statutory liquidated damages under section 202.004(c) of the
Property Code, and attorney’s fees pursuant to section 5.006 of the Property Code.
See Tex. Prop. Code Ann. §§ 5.006, 202.004(c) (West 2014). In response, the Bahrs
filed their original answer, special exceptions, affirmative defenses, and
counterclaim. In the counterclaim, they sued the Association and its board of
directors, individually. The counterclaim sought declaratory judgment pursuant to
chapter 37 of the Texas Civil Practices and Remedies Code. See Tex. Civ. Prac.
Rem. Code Ann. §§ 37.001–.011 (West 2015). The Association filed a Rule 91a
motion to dismiss asserting the Bahrs’ counterclaims had no basis in law or fact. See
Tex. R. Civ. P. 91a. In response, the Bahrs filed their first amended answer, special
exceptions, affirmative defenses, and counterclaim. The trial court granted the
Association’s Rule 91a motion to dismiss and dismissed the Bahrs’ counterclaim as
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to all defendants.1, 2 The original parties then filed competing motions for summary
judgment. After a hearing, the trial court denied the Bahrs’ motion for summary
judgment, but granted the Association’s motion for summary judgment.
The Bahrs present three issues on appeal. First, they assert the trial court erred
by granting the Association’s temporary injunction. Second, the Bahrs assert the trial
court’s Rule 91a dismissal was “manifest constitutional error and manifest error on
the entire case.” Finally, the Bahrs argue the trial court’s summary judgment in favor
of the Association was “manifest constitutional error and manifest error on the entire
case.”3
1
The Bahrs attempted to pursue an interlocutory appeal of the trial court’s
Rule 91a dismissal of their counterclaims by filing a “Motion for Order for
Interlocutory Appeal on Controlling Question of Law.” Despite the trial court’s
denial of the Bahrs’ request to file an interlocutory appeal, the Bahrs filed a notice
of interlocutory appeal. This court dismissed the interlocutory appeal for lack of
jurisdiction. See Bahr v. Emerald Bay Prop. Owners Ass’n, Inc., No. 09–15–00363–
CV, 2016 WL 1054506, at *1 (Tex. App.—Beaumont, Mar. 17, 2016, no pet.) (mem.
op.).
2
The trial court’s order dismissed the Bahrs’ counterclaims jointly against all
defendants to the counterclaim. The individual directors, namely Sharon Jeans, Ted
Ankney, and Martha Freeman, have not filed briefs in this appeal.
3
Despite the Bahrs’ complaints of “manifest constitutional error,” nowhere in
their brief is the constitution cited, and the excerpts from the reporter’s record cited
do not direct us in any way as to which argument they support. An appellant’s brief
must “contain a clear and concise argument for the contentions made, with
appropriate citations to authorities and to the record.” Tex. R. App. P. 38.1(i).
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II. Issue One: Temporary Injunction
While the Bahrs complain in their brief about a temporary injunction entered
by the trial court, the trial court issued a permanent and mandatory injunction in its
final summary judgment order, making the issue of a temporary injunction moot.
Isuani v. Manske-Sheffield Radiology Group, P.A., 802 S.W.2d 235, 236–37 (Tex.
1991) (holding appeals court erred in reaching merits of interlocutory appeal of
temporary injunction after trial court entered permanent injunction rendering
temporary injunction moot). Therefore, we overrule the Bahrs’ first issue.
III. Issue Two: Rule 91a Motion to Dismiss
A. Standard of Review
In their second issue, the Bahrs argue the trial court erred in granting the
Association’s Rule 91a motion to dismiss their counterclaim against all defendants.
Rule 91a allows a party to move to dismiss a cause of action that has no basis in law
or fact. Tex. R. Civ. P. 91a.1. “We review the merits of a Rule 91a motion de novo
because the availability of a remedy under the facts alleged is a question of law and
the rule’s factual-plausibility standard is akin to a legal-sufficiency review.” City of
Dallas v. Sanchez, 494 S.W.3d 722, 724 (Tex. 2016) (citing Wooley v. Schaffer, 447
S.W.3d 71, 75–76 (Tex. App.—Houston [14th Dist.] 2014, pet. denied));
GoDaddy.com, LLC v. Toups, 429 S.W.3d 752, 754 (Tex. App.—Beaumont 2014,
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pet. denied). In likening a Rule 91a motion to dismiss to a federal Rule 12(b)(6)
motion, this court noted “dismissal is appropriate if the court determines beyond
doubt that the plaintiff can prove no set of facts to support a claim that would entitle
him to relief.” Toups, 429 S.W.3d at 754 (citing Scanlan v. Tex. A&M Univ., 343
F.3d 533, 536 (5th Cir. 2003)); see also Fed. R. Civ. P. 12(b)(6). Whether a cause of
action has any basis in law or fact is a legal question, based on allegations in the live
pleadings and any attachments. Weizhong Zheng v. Vacation Network, Inc., 468
S.W.3d 180, 183 (Tex. App.—Houston [14th Dist.] 2015, pet. denied) (citing
Wooley, 447 S.W.3d at 76).
B. Analysis
The Bahrs’ counterclaim sought a declaratory judgment pursuant to Chapter
37 of the Civil Practices and Remedies Code, seeking a declaration that the
Association and its officers “had no authority to enforce the deed restrictions and
have waived the right to enforce the building of a fence on the Bahr’s (sic) property,
in that the same kind of fences have been approved[.]” See Tex. Civ. Prac. & Rem.
Code Ann. §§ 37.001–.011. In support of their counterclaim, the Bahrs asserted that
the Association was involuntarily dissolved by the Secretary of State on March 8,
1995, for failure to pay franchise taxes and was not reinstated until July 28, 2014.
Thus, the Bahrs asserted the 1999 Amended Restrictions containing the fence
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provision were void as they were filed while the Association’s “right to conduct
business affairs was forfeited, involuntarily dissolved, and made null and void[.]”
The Bahrs essentially made three arguments in their counterclaim. Initially,
they assert the Association waived its right to enforce the Amended Restrictions. In
their amended answer and counterclaim, the Bahrs seemed to assert that waiver or
abandonment of the deed restrictions by the Association entitled them to affirmative
relief. “The Declaratory Judgments Act is ‘not available to settle disputes already
pending before a court.’” See BHP Petroleum Co., Inc. v. Millard, 800 S.W.2d 838,
841 (Tex. 1990) (quoting Heritage Life v. Heritage Group Holding, 751 S.W.2d 229,
235 (Tex. App.—Dallas 1988, writ denied)). A declaratory judgment counterclaim
that has greater ramifications than the original suit is allowed. Id. at 842. In order to
have “greater ramifications” the counterclaim must seek some sort of affirmative
relief rather than assert a mere denial of the plaintiff’s claim. Howell v. Mauzy, 899
S.W.2d 690, 706 (Tex. App.—Austin 1994, writ denied); HECI Expl. Co. v. Clajon
Gas Co., 843 S.W.2d 622, 638–39 (Tex. App.—Austin 1992, writ denied). A
defensive pleading must allege the defendant’s cause of action entitles him to the
recovery of benefits, compensation, or relief, independent of the plaintiff’s claim, in
order to qualify as a claim for affirmative relief. Gen. Land Office of Tex. V. OXY
U.S.A., Inc., 789 S.W.2d 569, 570 (Tex. 1990) (internal citations omitted).
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Waiver and abandonment are affirmative defenses to the Association’s claims
against the Bahrs, not a claim that would entitle the Bahrs affirmative declaratory
relief by a counterclaim, as the issue of the enforceability of the deed restrictions
was already before the trial court. See BHP Petroleum, 800 S.W.2d at 841–42. There
are certain situations where a declaratory judgment counterclaim is appropriate for
conflicts surrounding deed restrictions, for example when parties seek a declaration
that the amendments are void in their entirety or seek to clarify and define the parties’
ongoing relationship in the future. See Owens v. Ousey, 241 S.W.3d 124, 132–33
(Tex. App.—Austin 2007, pet. denied). That is not the case here. The Bahrs sought
a declaration that the Association “had no authority to enforce the restrictions and
have waived the right to enforce the building of a fence on the Bahr’s (sic)
property[.]” The Bahrs’ counterclaim did not seek to clarify or define the
relationship for the future, but rather, sought to determine whether the Association
could enforce the fence provision against the Bahrs’ property in this particular
instance. Cf. id. at 133. Thus, the counterclaim sought nothing beyond that which
was already before the trial court.
The Bahrs’ emphasis on the Association’s forfeiture of its corporate status is
misplaced. Section 22.362 of the Nonprofit Corporations Act governs the effect of a
forfeiture. See Tex. Bus. Orgs. Code Ann. § 22.362 (West 2012). That section
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provides that “[t]he forfeiture of the right to conduct affairs in this state does not[]
impair the validity of a contract or act of the corporation[.]” Id. § 22.362(c)(1).
Despite the Bahrs’ assertion to the contrary, the validity of the 1999 Amended Deed
Restrictions was not impacted by the tax forfeiture. See id. The Association paid the
requisite penalties, filed the necessary report, and its corporate status was reinstated
on July 28, 2014, prior to the initiation of the underlying lawsuit. The reinstatement
letter is attached to the Bahrs’ amended answer and counterclaim. While under the
effect of a forfeiture, a corporation may not maintain an action, suit, or proceeding
in court; however, the Association was reinstated as a corporation prior to the
commencement of the underlying lawsuit in this case. See id. § 22.362(a)(1); id. §
22.365 (West 2012); Lyons v. Texorado Oil & Gas Co., 91 S.W.2d 375, 378 (Tex.
Civ. App.—Amarillo 1935, writ ref’d) (holding a contract was not void that was
made by a domestic corporation while its right to do business in Texas was forfeited
for failure to pay its franchise tax).
Finally, the Bahrs also assert that the Association did not have the authority
to amend the deed restrictions until June 1, 2000. However, the original restrictions
executed on March 25, 1983, and attached to the Bahrs’ live pleading, provided they
“shall be binding upon all parties and all persons claiming under them until June 1st,
2000 . . . unless an instrument signed by a majority of the then owners of the tract
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has been recorded, agreeing to change said covenants in whole or in part.” (Emphasis
added). The plain language of the restrictions allowed for a majority of the owners
to change the covenants. The original dedicatory instrument was attached to the
Bahrs’ live pleading, together with the executed acknowledgments of a majority of
the owners that showed the ratification of the 1999 Amended Restrictions.
Therefore, the Bahrs’ arguments lack merit.
Because the live pleadings establish the Bahrs’ counterclaim had no basis in
law or fact, the trial court did not err in granting the Association’s 91a motion to
dismiss as to the Bahrs’ counterclaim. See Tex. R. Civ. P. 91a.1. We overrule the
Bahrs’ second issue on appeal.
IV. Issue Three: Summary Judgment
A. Standard of Review
We review a summary judgment de novo. Provident Life & Accident Ins. Co.
v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). In doing so, “[w]e review the evidence
presented in the motion and the response in the light most favorable to the party
against whom summary judgment was rendered, crediting evidence favorable to that
party if reasonable jurors could, and disregarding contrary evidence unless
reasonable jurors could not.” Mann Frankfort Stein & Lipp Advisors, Inc. v.
Fielding, 289 S.W.3d 844, 848 (Tex. 2009) (citing City of Keller v. Wilson, 168
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S.W.3d 802, 807, 827 (Tex. 2005)). The moving party bears the burden of showing
no genuine issue of material fact exists, and it is entitled to judgment as a matter of
law. Tex. R. Civ. P. 166a(c); Mann Frankfort, 289 S.W.3d at 848; Knott, 128 S.W.3d
at 216. When both sides move for summary judgment, granting one and denying the
other, we review summary judgment evidence presented by both sides and determine
all questions presented. Mann Frankfort, 289 S.W.3d at 848 (citing Comm’rs Court
of Titus Cty. v. Agan, 940 S.W.2d 77, 81 (Tex. 1997)). We will render the judgment
that the trial court should have rendered. Myrad Props., Inc. v. LaSalle Bank Nat.
Ass’n, 300 S.W.3d 746, 753 (Tex. 2009); Agan, 940 S.W.2d at 81.
B. Analysis
The Association filed a motion for summary judgment on both traditional and
no-evidence grounds. See Tex. R. Civ. P. 166a; 166a(i). That motion challenged each
of the Bahrs’ affirmative defenses. Further, the Association timely objected to the
affidavits filed by the Bahrs as summary judgment evidence and requested the trial
court strike such evidence. The Association objected to the conclusory statements
contained in the affidavits and argued the affidavits contained statements that were
hearsay. The Association also objected to the purported business records affidavit of
Margaret Main. The Bahrs attempted to authenticate documents as business records
attached to their motion for summary judgment with the affidavit of Main. However,
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Main was not the records custodian at the time the affidavit was executed and had
not been the secretary of the Association since 2004. Additionally, the Association
objected to exhibits 11–39 attached to the Bahrs’ motion for summary judgment,
which included photographs, a string of emails, and a map allegedly revealing other
violations of deed restrictions in the subdivision. The Association objected to these
exhibits on the basis of improper predicate and hearsay. The trial court sustained the
objections, and the Bahrs failed to remedy or supplement their summary judgment
evidence.
“A conclusory statement is one that does not provide the underlying facts to
support the conclusion.” Dolcefino v. Randolph, 19 S.W.3d 906, 930 (Tex. App.—
Houston [14th Dist.] 2000, pet. denied) (internal quotes omitted). Affidavits
providing no basis for personal knowledge are legally insufficient. Kerlin v. Arias,
274 S.W.3d 666, 668 (Tex. 2008). Because affidavits containing conclusory
allegations are not proper summary judgment proof, the trial court properly struck
these affidavits upon objection by the Association. See Tex. R. Civ. P. 166a(f);
Dolcefino, 19 S.W.3d at 930. Affidavits in support of or in opposition to summary
judgment must present facts as would be admissible in evidence. See United Blood
Servs. v. Longoria, 938 S.W.2d 29, 30 (Tex. 1997) (discussing expert affidavits).
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The only evidence remaining in support of the Bahrs’ motion for summary
judgment was the Association’s recorded dedicatory instruments, a letter from the
secretary of state indicating the corporation was dissolved, and the 1999 amended
deed restrictions. The dedicatory instruments, together with the 1999 amendments,
support the claims of the Association by establishing the existence of the amended
restrictions, and we have already explained why the forfeiture of the Association’s
corporate status would not support the Bahrs’ arguments.
The trial court sustained the Association’s objections to the Bahrs’ affidavits
and other summary judgment evidence. On appeal, the Bahrs complain the trial court
granting the Association’s motion for summary judgment was “manifest
constitutional error and manifest error on the entire case.” Specifically, the Bahrs
argue striking their affidavits and summary judgment evidence was error; however,
there are no arguments made by the Bahrs or any authorities cited to support their
assertion that their affidavits or other summary judgment evidence was proper, other
than to make the blanket assertion the affidavits were “based upon personal
knowledge.”
“In reviewing whether a summary judgment was properly granted, we may
not consider struck portions of the record because that evidence is not a part of the
summary judgment record.” McCollum v. Bank of N.Y. Mellon Trust Co., 481
14
S.W.3d 352, 362 (Tex. App.—El Paso 2015, no pet.) (citing Trudy’s Tex. Star, Inc.
v. City of Austin, 307 S.W.3d 894, 898 n.2 (Tex. App.—Austin 2010, no. pet.)).
Because the Bahrs failed to show on appeal that the trial court erred in striking their
affidavits, we cannot consider that evidence in our review of the trial court’s
summary judgment. See id. (holding that the trial court was required to grant no-
evidence motion for summary judgment because nonmovant’s evidence had been
stricken). “When an appellee objects to evidence on several independent grounds
and, on appeal, the appellant complains of the exclusion of the evidence on only one
of those grounds, the appellant waives any error by failing to challenge all possible
grounds for the trial court's ruling that sustained the objection.” Gulley v. Davis, 321
S.W.3d 213, 218 (Tex. App.—Houston [1st Dist.] 2010, pet. denied) (citing Trahan
v. Lone Star Title Co. of El Paso, Inc., 247 S.W.3d 269, 284 (Tex. App.—El Paso
2007, pet. denied)); see also Katy Springs & Mfg., Inc. v. Favalora, 476 S.W.3d 579,
607 (Tex. App.—Houston [14th Dist.] 2015, pet. denied) (holding appellant waived
error with regard to trial court’s striking of affidavit because appellant failed to
challenge on appeal all possible grounds for the trial court’s ruling).
The Bahrs have failed on appeal to identify any statements in the affidavits
that were not stricken. Additionally, they have failed to show in their brief to this
Court how their summary judgment evidence and affidavits were improperly
15
stricken. Because they have failed to articulate how any statements not struck raise
a genuine issue of material fact as to their affirmative defenses or to raise any issue
that would negate the Association conclusively establishing the existence of the deed
restrictions and the Bahrs’ violation of those restrictions, we hold the trial court did
not err in ruling the Association was entitled to judgment as a matter of law. See
Tex. R. Civ. P. 166a; 166a(i). We overrule issue three.
V. Conclusion
We conclude the Bahrs’ complaints regarding the temporary injunction are
moot because the court subsequently issued a mandatory and permanent injunction
in the case. Additionally, we conclude the trial court did not err in granting the
Association’s Rule 91a motion to dismiss. On appeal, the Bahrs failed to show their
summary judgment evidence was improperly stricken or otherwise raise a genuine
issue of material fact either by their motion for summary judgment or in response to
the Association’s motion for summary judgment. The Association conclusively
established the enforceability of the 1999 Amended Deed Restrictions impressed
upon the property and that the Bahrs’ construction of a fence was in violation of
those restrictions. Therefore, the trial court did not err in granting summary judgment
for the Association and in denying the Bahrs’ motion for summary judgment. Having
overruled all issues on appeal, we affirm the trial court’s judgment.
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AFFIRMED.
________________________________
CHARLES KREGER
Justice
Submitted on November 2, 2017
Opinion Delivered May 24, 2018
Before McKeithen, C.J., Kreger, and Johnson, JJ.
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